SINGAPORE Airlines’ new medium- and longhaul low-cost subsidiary Scoot has unveiled Sydney as its inaugural destination.

Scoot, which will operate out of Changi International Airport's Terminal 2, will offer a daily service to and from Sydney when it takes flight in June next year.

With the launch of its first-ever route, Scoot will become the only budget carrier offering direct flights from Singapore to the capital of New South Wales, with competitors such as Jetstar and AirAsia X choosing to fly to other Australian destinations.

"Scoot's decision to fly its first service between Sydney and Singapore from mid-2012 is fantastic news," said Barry O'Farrell, premier of New South Wales.

“This is a significant step towards our goal of doubling tourism expenditure by 2020, placing Sydney front and centre of the boom in budget travel in emerging markets like Singapore, China and India."

According to a report in Channel NewsAsia, Scoot’s choice of Sydney as its initial destination was the result of an alliance between Destination New South Wales (NSW) and Sydney Airport to promote Sydney to new airlines and compete for new routes.

As part of the agreement, Destination NSW will be also be working with Scoot, Sydney Airport and Tourism Australia on a two-year joint marketing initiative to promote the new route.